Mishra Dhatu Nigam Ltd

MIDHANI stands as a testament to a visionary aspiration – one that aimed to propel India towards self-sufficiency in the manufacturing of critical alloys. Today, as we gather, it is imperative that we reflect upon the illustrious history that MIDHANI has scripted and use it as a foundation upon which to build an even more promising future.

Dear Shareholders,

It gives me immense pleasure to welcome you all at the 49^th Annual General Meeting of Members of Mishra Dhatu Nigam Limited (MIDHANI). This year, we proudly celebrate the 50^th Anniversary of MIDHANI, marking a significant milestone in our journey. MIDHANI stands as a testament to a visionary aspiration – one that aimed to propel India towards self-sufficiency in the manufacturing of critical alloys. Today, as we gather, it is imperative that we reflect upon the illustrious history that MIDHANI has scripted and use it as a foundation upon which to build an even more promising future. When we delve into the past, we encounter the invaluable contributions of distinguished scientists who turned the vision of MIDHANI into a tangible reality. The year was 1970, a time when India was reflecting upon the conflicts it faced with China in 1962 and Pakistan in 1965. The pressing need for a robust defence modernization strategy rooted in indigenous resources and self-reliance came to the forefront. In this context, Dr. R.V. Tamhankar, a renowned Metallurgist and the founding Director of the Defence Metallurgical Research Laboratory (DMRL), presented a visionary proposal to the Government of India. His proposal outlined the establishment of a manufacturing plant specializing in Super Alloys and Special Metals within India. This strategic initiative aimed to fulfill the nation's critical and essential requirements. Driven by his foresight, the seeds of what would be termed the 'Golden Age' of contemporary and intricate metallurgy in India were sown.

Dr. Brahm Prakash, yet another distinguished scientist renowned in the field of atomic energy, played a pivotal role in the establishment of MIDHANI. The 'Brahm Prakash Committee' was entrusted by the Government of India with the task of meticulously examining the project proposal from various angles, including strategic forecasts and potential exports. This committee's report became the cornerstone upon which MIDHANI was founded, revising the initial estimated budget from H 39 Cr. to H 79 Cr. The committee report also cemented the prime purpose of MIDHANI which was to cater the strategic needs of country and also to achieve self-reliance, especially in Defence industries. MIDHANI is a story of resilience, determination and dreams of people who wanted a self-reliant India. We pay homage to the immeasurable contributions of both Dr. R.V. Tamhankar and Dr. Brahm Prakash. Their dedication and service laid the groundwork for us to commemorate 50 years marked by innovation, excellence, and transformative achievements. After a decade of meticulous preparations, MIDHANI proudly initiated its commercial production in the year 1983, and the subsequent chapters in its journey have become the cornerstone of its legacy. Through persistent integration and technological advancements, MIDHANI emerged as leader in advanced metallurgical production for supplying critical alloys and products of national security and strategic importance. MIDHANI has panoply of grades of high value speciality steel, Superalloys and Titanium Alloys which have its application in strategic sectors such as Defence, Space and Energy. MIDHANI is also marking its presence in armouring solutions and railways. As we convene for this Annual General Meeting, we are presented with the chance to collectively contemplate these significant advancements and the profound implications they carry. As we contemplate MIDHANI's remarkable 50-year journey, its incumbent upon us to contemplate how we can further enrich the path that lies ahead.

FY 2022-23 has been a year where commissioning of new critical facilities has led to amplified capacity and a more diversified product portfolio. Notably, within this fiscal year, the inauguration of the Wide Plate Mill (WPM) was a standout event, graced by the presence of the Hon'ble President of India, Smt. Droupadi Murmu, on December 27, 2022. WPM stands as a distinctive rolling facility in India, capable of accommodating thicknesses of up to 9mm. The WPM facility has helped us cater to the specific requirements of the Vikram Sarabhai Space Centre (VSSC) for the esteemed 'Gaganyaan Mission.' This was exemplified by the supply of Titan 31 slab, a momentous accomplishment as it marked the first-ever production of this material. During FY 2022-23, MIDHANI's Armour Unit at Rohtak, Haryana has also supplied bullet proof vehicles to J&K Police and also supplied mine proof vehicles to vehicles factory at Jabalpur. MIDHANI has also developed, high performance material for construction of Advanced Ultra Super Critical (AUSC) thermal energy plant which will lead to reduction in fossil fuel consumption. Coming to aerospace sector, MIDHANI achieved a milestone by supplying feedstock and mill forms of high-temperature alloys for ‘Kaveri Dry Engine Program' and by developing Superni 115 LPT blade blank for aeroengines. The accomplishments of MIDHANI in the fiscal year 2022-23 were not immune to challenges. Over the past years, our journey has been marked by significant disruptions, notably the global COVID-19 pandemic and the Russia-Ukraine conflict, both of which have cast shadows over economic outlooks, not only in the South Asian region but across the globe. These external factors have exerted upward pressure on the prices of critical raw materials, introducing volatility to the market dynamics. Furthermore, the supply chain experienced constraints, presenting us with the formidable challenge of adhering to delivery schedules. The surge in energy prices during the fiscal year 2022-23 also reverberated across our operations, affecting the economics of scale. Despite these headwinds, our determination and resilience have remained unwavering, enabling us to navigate through these turbulent times and to continue our journey of progress.

During FY 2022-23, MIDHANI achieved a revenue of H 87,194.14 Lakh which is highest ever revenue achieved with a Year-on-Year (YoY) growth of 1.45%. Despite a modest YoY growth of 1.45%, this achievement is noteworthy considering the challenges MIDHANI faced. Supply chain limitations and volatile raw material prices affected our revenue, making this accomplishment even more significant. In FY 23, the Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) to revenue ratio stood at 33.86%, amounting to H 29,528.58 Lakh. This is a marginal decline from the FY 22 ratio of 34.16%, equivalent to EBITDA H 29,361.48, reflecting a YoY decrease of 0.3% in EBITDA to Revenue. The slight decrease in EBITDA to Revenue can be attributed to the volatility in raw material prices and energy costs. However, this impact was mitigated to some extent by increased operational efficiency. As a result, MIDHANI successfully minimized the adverse effects on EBITDA margins. In FY 23, the Profit Before Tax (PBT) amounted to H 21,654.92 Lakh, compared to

H 23,911.98 Lakh in FY 22, signifying a YoY decrease of 9.43%. This decrease was primarily attributed to higher depreciation and finance costs incurred during the year. In FY 23, the Profit After Tax (PAT) totalled H 15,587.61 Lakh, in contrast to H 17,630.77 Lakh in FY 22, resulting in a YoY decrease of 11.59%. MIDHANI achieved Value of Production (VoP) H 1,10,026 Lakh during FY 2022-23 vis-?-vis H 1,01,358 Lakh achieved for

FY 22 translating into YoY growth of 8.55%. During FY 23 there was an adverse impact of H 4,800 Lakh due to price variance of Raw Materials. However, due to efficient and effective utilization of scrap, MIDHANI was able to save material consumption cost amounting to H 3,194 Lakh. On exports front, MIDHANI achieved direct exports amounting H 2,064.70 Lakh during FY 23.

As on April 1, 2023, MIDHANI had an order book position of H 1,33,104 Lakh vis-?-vis H 1,31,700 Lakh as on April 1, 2022, registering a YoY growth of 1.06%.

During FY 23, MIDHANI declared and paid an Interim Dividend of H 1.68 per equity share and recommends for approval of Members a Final Dividend of H 1.67 per equity share. The cumulative dividend (declared and recommended) by MIDHANI stands at H 3.35 per equity shares which is highest ever. The standalone and consolidated financial results forms part of this Annual Report, Members may kindly refer the report for more detailed information.

During FY 23, MIDHANI has provided due emphasis on facility augmentation. During

FY 23, MIDHANI spent H 7,581 Lakh as CAPEX and spent H 2,026.78 Lakh towards Research and Development. During FY 23, MIDHANI developed various grades which has its application space, aerospace and energy sector. A standout achievement was the supply of Alloy C276, a solid solution strengthened nickel-molybdenum-chromium alloy with a minor tungsten addition developed in the 8T Vaccum Induction Melting Furnace and Wide Plate Mill. These alloys, once imported by Bharat Heavy Electricals Limited (BHEL), are now domestically produced. Setting up of the Wide Plate Mill has also helped in saving outsourcing cost by rolling plates in house.

MIDHANI's armour unit at Rohtak, Haryana which was commissioned in Quarter 2 of FY 23 recorded revenue of around H 3,200 Lakh. MIDHANI also developed a unique bullet proof jacket (Garuda) for Indian Air Force. In FY 24, a new Titanium Shop will be commissioned, which will enable MIDHANI to supply additional 500T of Titanium Alloy annually. The Bar & Wire facility of MIDHANI has been operating as its maximum capacity and in FY 24 the facility will be augmented to meet the customers requirement. The 30T Bogie Hearth Furnace and 20 T Fixed Hearth Furnace will be commissioned during FY 24 which is part of MIDHANI's modernisation initiative. Indian Railways imports approx. 50,000 axles p.a. for its passenger coaches. MIDHANI's supply of 400 Axles to Indian Railway during FY 23 though a small step, would be a big leap in MIDHANI's presence in Railway Sector as there are orders in pipeline from Indian Railways.

MIDHANI is committed to upholding the principles of good governance, integrity, and transparency in all its processes. MIDHANI has adopted Business Responsibility and Sustainability Reporting which forms part of this Annual Report. During FY 23, there has been reduction in water utilization, air emissions (other than Green House Gases) which was way below than National Ambient Air Quality Standards. On Corporate Social Responsibility front, MIDHANI spent H 393.42 Lakh during FY 23 which covers healthcare, sanitisation, education and promotion of skill. MIDHANI also sponsored education for children belonging to SC/ST with low-income background. MIDHANI organised precautionary dose/3^rd dose COVID vaccination camp as part of Azadi Ka Amrit Mahotsav for all employees including casual and contract employees along with their spouse in month of August 2022.

We are ever committed and will always continue in our endeavour to strengthen our Corporate Governance function with clear organisational strategy, effective risk management, corporate social responsibility and transparency and information sharing with our stakeholders. Our Board and Senior Management adhere to our Code of Conduct. Our policies and procedures are continuously evaluated and upgraded to keep the organisational integrity intact and uphold values. We continue to follow, in letter and spirit, the guidelines issued by the Department of Public Enterprises. We are happy to report that, your Company scored 100% as per the revised grading norms for CPSEs, conducted by the DPE on compliance of guidelines on Corporate Governance. A Report on Corporate Governance and certificate on Corporate Governance issued by Practicing Company Secretary forms part of this Annual Report.

MIDHANI has expertise in meeting diversified and critical requirements of its customers. Our performance underscores our dedication to fulfilling our customers' needs and acting as a catalyst for comprehensive growth. In the face of strained geopolitical relations and supply chain complexities, our optimism remains steadfast, fueled by the transformative evolution of the Indian Defence Industry. Recent governmental initiatives have opened substantial avenues to serve our nation's strategic sectors and foster self-reliance.

I would like to thank our customers and supplier vendors for their constant support and belief in our capabilities. I would like to thank my colleagues on the Board for their valuable guidance. A dedicated and talented manpower is MIDHANI's indispensable strength, I would to like to thank each and every employee of our Company for their efforts and dedication. I also like to place on record the support from our Administrative Ministry and Government agencies.

I am confident that, MIDHANI will continue to scale greater heights and deliver value to all stakeholders under the stewardship of its astute management. Together, we shall stride forward into the future, fortified by the legacy we've inherited and the prospects that await us.

Thank You

Jai Hind !

Chairman & Managing Director